Orsted A/S has come to an agreement to vend its continental European land-based wind segment to the Danish investor CIP, marking the accomplishment of its disposal strategy.
The Danish sustainable energy firm offered its onshore division for acquisition earlier in the year, part of an extensive plan to bolster its financial stability, featuring a substantial capital raise following Orsted’s sequence of difficulties within the formerly promising U.S. offshore wind sphere.
The onshore asset comprises over 800 megawatts either functioning, being built, and initiatives in advancement across Ireland, the UK, Germany, and Spain, as stated by the company in a press release on Tuesday. Orsted’s emphasis is directed towards maritime wind, generating the bulk of its income and expenditures.
“The transaction involving our European land-based wind platform concludes our intended divestment scheme and considerably improves Orsted’s monetary footing,” communicated CFO Trond Vestli.
Orsted’s stock dipped by 1.2% at 9:40 a.m. Copenhagen time, subsequent to an initial climb of up to 1.4%. Despite headway in divesting businesses and downsizing personnel, the future for offshore wind in Europe persists as uncertain. Increased expenses have triggered multiple unsuccessful tenders, most recently in Germany. Sector representatives are urging administrations to supply grants, assuring set electricity rates for wind park proprietors.
Orsted is experiencing difficulty in executing a turnaround plan subsequent to setbacks in the US, resulting in numerous costly endeavors. The issues have been aggravated by the Trump government’s involvement, which has suspended the progression of ocean ventures, pausing a pivotal undertaking pending judicial pronouncement.
Having confronted these obstacles, Orsted intends to finalize two substantial wind installations within the United States before shifting focus back to Europe, where it foresees more robust growth possibilities. On Monday, a US court authorized the recommencement of operations on the Sunrise wind farm near Long Island, New York, which had been halted by the federal authorities and was incurring losses of $2.5 million per day.
Citigroup analysts Jenny Ping and Mark Yip Tat Kuen observed that this verdict and today's transaction “ought to additionally fortify Orsted's monetary standing.”
The CIP agreement is anticipated to be finalized during the second quarter.
Among the ultimate contenders to procure the onshore division, according to Bloomberg in December, was the French entity Engie SA.
Source: Bloomberg